Right Thinking From The Left Coast
Do, or do not. There is no 'try'. - Yoda

Monday, April 04, 2011

Now That’s What I’m Talking About

See.  I knew that guy wasn’t bullshit:

Republicans will present this week a 2012 budget proposal that would cut more than $4 trillion from federal spending projected over the next decade and transform the Medicare health program for the elderly, a move that will dramatically reshape the budget debate in Washington.

The budget has been prepared by Rep. Paul Ryan, a Wisconsin Republican and the new chairman of the House Budget Committee, and it represents the most complete attempt so far by Republicans to make good on their promises during the 2010 midterm elections to cut government spending and deficits.

In a nutshell, the plan would dismantle the infrastructure of Medicare and Medicaid and transform them into far smarter programs.  Medicare would become a voucher program for seniors to buy health insurance.  This would give the government direct control over the reins of federal health spending without micro-managing it.  Safeguards can be built in to keep insurers from only taking the most healthy Medicare patients.  McArdle:

It seems quite likely to me that vouchers are going to be better at controlling health care cost growth than a central committee.  Every committee decision that cuts off a potentially useful treatment (and I’m afraid it can’t all be back surgery and hormone replacement therapy) will trigger a lobbying explosion from affected groups.  Each treatment is a decision with a small marginal cost to the taxpayer; it’s in aggregate that they become expensive.  Which means that the congressional tendency is always going to be to override--and while there are supposed to be structural barriers against this in the bill, they aren’t very strong . . . about like trying to quit smoking by hiding your cigarettes from yourself.

Whereas if you put the decision about what treatments to cover in the hands of the patient, the lobbying you face is to increase the overall value of the voucher.  To be sure, this will have a larger (and therefore more powerful) group behind it.  But it will also come with an enormous pricetag, making it much harder for our politicians to rationalize the decision.

Think about what happened when a recent study questioned the value of routine mammography—a procedure that is not cheap.  Congress didn’t ask to see the science.  They immediately passed a law mandating mammogram coverage.  Do you think their spines will strengthen when any other procedure proves useless?  Hell, the wonderful science-based Democrats tried to get coverage for alternative medicine (i.e., bulllshit) like Therapeutic Touch into PPACA.

(And for those of you who are about to tell me that the insurance companies can’t possibly run Medicare as efficiently as the government can, I refer you to my debunking of this myth.  One in five Medicare dollars is paid out to non-existent services.  Private companies can’t possibly do worse than that.)

Medicaid would be block-granted to the states.  This too, is a great idea.  Right now, the states can write checks knowing the government is required to cough up half the dough.  In addition, the feds can expand Medicaid eligibility knowing the states will cough up half the dough.  Block-granting the program would break that vicious cycle of perverse incentives.  It would also allow all fifty states to create their own Medicaid programs to see which ones work better than others.  Think about that for a moment: what happens if, say, Texas combines vouchers with high-deductible major medical coverage and saves billions?  It was state experiments with welfare that produced Clinton’s highly successful welfare reform.

Ryan would also overhaul the tax system although taxes would not go up.  I’m of the opinion that taxes will probably have to go up with our aging population, but I’m glad the GOP is starting out from a no-hike position.  It leaves open the possibility of a grand bargain that would bring in Democrats.

Discretionary spending would be capped at a percent of GDP.  I’m a little nervous about that but it’s a good place to start.  I would also like to see defense spending cuts on the table.

Now when you combine this with a potential deal to finish the 2011 budget with another $30 billion in cuts, this is looking like a good week for the GOP.  I don’t mean politically.  I mean this has been a good week for the GOP in governing.

What happens next is that we see what the Democrats are made of.  I expect them to disappoint me—to come out denouncing the plan as “extreme” until they are blue in the face.  But I’m prepared to be surprised.  If they come out and say, “We don’t like this proposal, but it’s a serious one and we’re willing to negotiate”, then there’s hope for us all.  But if they come out with their focus-group approved “extremist” rhetoric ... well, we’ll just have to wait until 2012.

I said a few months ago that it was time to get serious about the budget.  Looks like the GOP just got serious.  Bravo.

Posted by Hal_10000 on 04/04/11 at 06:48 PM in Politics   Law, & Economics  • (0) TrackbacksPermalink
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